VECO execs plead guilty to bribery

Prosecutors say company founder, chief conspired to buy support of lawmakers

Posted: Tuesday, May 08, 2007

ANCHORAGE - Two top officers of an oil services company pleaded guilty Monday to bribing Alaska lawmakers with cash and the promise of jobs, contracts and favors for their backing on bills supported by the multinational firm.

Bill J. Allen, founder and chief executive of Anchorage-based VECO Corp., and Rick Smith, a vice president, pleaded guilty in U.S. District Court to extortion, bribery, and conspiracy to impede the Internal Revenue Service.

Allen's attorney did not immediately return calls for comment Monday. Smith's attorney, John Murtagh, declined comment.

Prosecutors say Smith and Allen conspired to buy the support of five state lawmakers, who are not named in charging documents.

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Allen also pleaded guilty to issuing company bonuses to VECO executives to repay them for campaign contributions they made to politicians, then claiming those bonuses as legitimate company expenses.

"It's an unfortunate day," said Amy Menard, an attorney for VECO. "No company wants to find itself where VECO is at. It's a difficult set of circumstances for any company to contend with."

Sentencing was not immediately scheduled. The sentence recommended for Allen is about 10 years in prison and a fine up to $150,000, according to the plea agreement dated Wednesday and unsealed Monday.

In exchange for Allen's cooperation, federal prosecutors agreed not to charge his son, Mark Allen, or other family members with any crimes.

The pleas came three days after federal prosecutors indicted one current and two former members of the Alaska House of Representatives on bribery and extortion charges related to last year's negotiations for a new oil and gas tax and a proposed natural gas pipeline.

The three indicted lawmakers - Rep. Vic Kohring of Wasilla and former Reps. Pete Kott of Eagle River and Bruce Weyhrauch of Juneau - pleaded not guilty Friday.

Kott, the former House speaker, is accused of accepting $8,993 in payments, $2,750 in polling expenses and the promise of a contract as a lobbyist for VECO in exchange for his support of the proposed pipeline and a tax proposal that favored VECO, according to court documents. He said he would throw his support behind the company if he was made warden of a prison the company was building in the Caribbean, according to the indictment.

The tax passed, but the contract for the pipeline negotiated by former Gov. Frank Murkowski was never approved.

VECO has said no corporate subsidiaries or other executives were involved.

Kohring is accused of demanding and accepting up to $2,600 in cash and a $3,000 job for a relative from VECO executives in exchange for his support. The indictment also alleges Kohring sought but did not receive a $17,000 loan for credit card debt.

On Monday, Kohring was stripped of his job as chairman of the House Oil and Gas Committee, though he remained a member of the panel. He issued a news release saying he agreed with the decision.

"I firmly believe in the judicial system and that a jury of my peers will find me not guilty of these charges at which time the leadership of the House has agreed to return me to my chair," Kohring said.

Weyhrauch, a 54-year-old lawyer, is charged with helping advance the oil service company's causes for the promise of legal work.

Menard said the corporation had turned over more than 100,000 pages of documents to the government.

An FBI spokesman said the arrests stemmed from an investigation that led federal agents last summer to raid the offices of at least six lawmakers, including Kohring, Kott and Weyhrauch. Also raided was the office of former Senate President Ben Stevens, the son of U.S. Sen. Ted Stevens.

The younger Stevens has not been charged.

VECO Corp. is an Alaska oil field services and construction company whose executives are major contributors to Republican political campaigns. The corporation also operates in Asia, the Middle East, the Caribbean and elsewhere in the U.S.

New Gov. Sarah Palin said Saturday she would call for a review of how the previous administration and the Legislature pursued that tax structure.

Charges against Bill Allen in PDF Format.

Charges against Richard Smith in PDF Format.

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